The giant lender’s profit in the first quarter fell by $ 1.6 billion to $ 4.2 billion, which is likely to be repeated throughout the sector due to bad debts due to Ukraine the war is growing.
Wall Street banks similar falls have already been reported.
Banks are under pressure to enforce Russian sanctions imposed by governments and regulators. CEO Noel Quinn said: “HSBC Russia is not accepting new businesses or customers and is therefore on a downward trend. The vast majority of our business in Russia serves multinational corporate clients headquartered in other countries, and as a world bank, HSBC is responsible for helping them cope with these challenging circumstances. ”
HSBC does not currently pay quarterly dividends, which will be considered next year.
Financial boss Ewan Stevenson notes that the likely rise in interest rates should protect profits and, in turn, dividends. “We are very sensitive to interest rates,” he said.
On Russia, he added: “There is a difference between banks and manufacturing companies. We have 300 multinational customers there; we have their deposits, we pay them to employers. We have trustworthy obligations to them. “
Shares of HSBC fell 20 pence to 482 pence today, but rose 15% from last year.
Quinn added: “The Russian-Ukrainian war continues to have devastating consequences both inside Ukraine and abroad.”
Rob Murphy of the Edison Group said:
“Against the backdrop of uncertainty in the global economy, HSBC has managed to exceed analysts’ expectations in this set of quarterly results. Profits have been significantly affected by a new surge in Covid-19 cases and restrictions in Hong Kong, HSBC’s largest market.
Revenues also came under pressure as weak stock and loan markets affected wealth and personal banking, as well as global debt markets and major investments in global banking and markets. As for the positive note, the bank continued to benefit from higher interest rates, net interest margin increased by 5 bp. to 1.26% ”.
The Common Equity Tier 1 ratio decreased by 1.7% mainly due to expected changes in regulation and foreclosure program.
As HSBC embarks on a multi-year strategic shift toward Asia, relocating more than $ 100 billion of its capital and cutting back on its European and American operations, the future success of lenders is due to its continued growth in Asia.
HSBC sees falling profits and protects Russian business
Source link HSBC sees falling profits and protects Russian business